Author: Bob Freedland
Covestor model: Buy and Hold Value
Disclosure: Long ABT, GE, HAIN, KO, TFM, SHW
I continue to work hard at identifying longer-trend growth/value prospects in this model tied to my aversion to losses. In July, I found myself whipsawed by a market that could not decide whether to stay gloomy or not with the spreading European Euro crisis, domestic economic weakness with the Presidential election getting nearer and a Congress that remained deadlocked and unable to pass legislation to deal with the domestic problems.
During the month I sold both my Amazon (AMZN) and Apple (AAPL) shares which were under selling pressure as quarterly results on Apple disappointed. The new iPhone5 appeared to be enough to cause many an Apple fan to delay a new purchase waiting instead for an enhanced product.
During the month I picked up shares of Abbott (ABT) which has an impending split of its business into the pharmaceutical and device business. This stock was also represented in my Healthcare model on Covestor. (In early August, I sold ABT on weakness.)
Bristol Myers Squibb (BMY) made a short appearance in the model during the month but stock price weakness and questions regarding insider training at the company depressed the stock price.
Similarly, I was unable to hang on to shares of Dollar General (DG), DXP Enterprises (DXPE), ECOLAB (ECL), Genesco (GCO) and Green Mountain Coffee Roasters (GMCR). I did initiate a new position in General Electric (GE) during the month.
I sold my Genuine Parts (GPC) position on weakness during the month. Twice bought and sold Hain (HAIN) and then purchased it a third time during the month. Home Depot (HD) and JCPenney (JCP) shares were sold during the month and a new position was established in Coca Cola (KO) during the month. I was unable to hold on to my Ross Stores (ROST), Starbucks was sold (SBUX) and Sally (SBH) was also let go due to price weakness. Transdigm (TDG) was cut due to weakness.
New positions were established in Fresh Market (TFM) and Sherwin Williams (SHW).
This was a difficult month for me. I am extremely averse to losses and am willing to sell even new purchases when the market heads ‘south’ to avoid excessive red ink. I continue to search for new names that can defy the volatility and selling pressure and hang on to historical winners as much as possible except if downturns are associated with fundamental negative news.
Overall I am quite satisfied how this model has been working out and look to revisit many of these names I have mentioned including hopefully finding an opportunity to get Apple (AAPL) back into the mix that appears to be required of any successful trading strategy these days.
Investing is not an easy business. But disciplined management of portfolios can hopefully continue to produce above average returns.
